TAXATION  IN  ILLINOIS. 


From  the  Commission  Appointed  to  Kevise  the 
Revenue  Laws  of  the  State, 


By  CPIARLES  S.  WALLER'1 

OF  CHICAGO, 

A MEMBER  OF  THE  COMMISSION. 


Published  by  the  Revenue  PvEeorm  Leahue  of  Cook  County  in  order  that  it  mat  be  presented 
TO  tan-payers  at  the  same  time  with  the  Majority  Report  of  the  Revenue 
Commission,  the  Secretary  of  State  not  deeming  that 
HE  HAD  authority  TO  PUBLISH  A MINORITY 
Report  at  the  expense  of 
THE  State. 


February,  188G. 

PRINTED  BY  THP.  CHICAGO  LEGAL  NEWS  CO., 


175  MONROE  ST. 


A MINORITY  REPORT  FROM  THE  REVENUE  COMMISSION. 


To  THE  Honorable  Thirty-fifth  General  AssexMbly  of  the  State  op  Illinois  : 
The  undersigned,  a member  of  the  Revenue  Commission  created  by  a joint  resolution  oftheThir- 
ty-fourth  General  Assembly  of  the  State  of  Illinois,  not  agreeing  in  some  essential  particulars 
with  the  majority  of  said  commission,  and  in  view  of  the  fact  that  its  entire  work  is  suggestive 
and  recommendatory  only,  respectfully  submits  to  your  honorable  body  the  following  minority 
report: 

The  joint  resolution  under  which  said  Commission  was  constituted  and  appointed  states  as 
follows : 

Whereas,  the  revenue  laws  of  the  State  of  Illinois  have  become  wholly  inadequate  to 
guarantee  equal  and  just  taxation  upon  all  the  property  of  the  State  as  required  by  the  Consti- 
tution, as  the  decrease  of  the  assessed  value  of  property,  year  after  year,  will  show,”  and 
'^'‘Whereas,  great  complaints  are  coming  from  the  people  that  real  estate  is  bearing  its  undue 
proportion  of  taxation,  while  other  property  and  great  interests,  largely  enjoying  the  protec- 
% tion  of  State  and  Municipal  government,  unjustly  escape  their  share  ipf  the  burdens  of  such 
Government,  and  whereas,  the  many  attempts  during  the  sessions  of  the  General  Assembly  to 
j amend  and  revise  the  revenue  la\ys  of  the  State  as  to  secure  a just  assessment  and  collection  of 
taxes,  have  signally  failed,  therefore  be  it 

^^Resolved,  hy  the  House  of  Representatives  of  the  State  of  Illinois,  the  Senate  conciirring 
therein,  that  the  Governor  is  hereby  authorized  and  directed  to  appoint  a committee  of  twelve 
men,  an  equal  number  of  which  shall  be  of  the  two  leading  parties  of  the  State,  with  authority 
to  propose  and  frame  a revenue  code,  which  in  their  opinion  and  best  judgment  shall  be  of 
practical  execution,  and  shall  be  iust  to  all  classes  of  property,  etc.” 

The  reasons  given  for  the  appointment  of  said  Commission  are  explicitly  stated,  and  the 
work  clearly  pointed  out  which  they  were  expected  to  do,  to  wit,  ” to  propose  and  frame  a rev- 
('  enue  code,”  which  “ shall  be  to  classes  of  property,”  and  ‘ ‘ guarantee  eoual  and  just 
taxation  upon  aZ?  the  property  of  the  State  as  required  by  the  Constitution.”  The  evils  com- 
plained  of  being  undeniably  true,  and  the  work  we  were  commissioned  to  do  being  so  clearly 
stated,  the  undersigned  at  an  early  stage  in  the  proceedings  of  the  Commission,  •submitted  the 
following  paper,  which  was  printed  and  laid  upon  the  desks  of  its  members: 

” irz^ereas,  the  Constitution  of  the  State  of  Illinois  requires  that  “the  General  Assembly 
shall  provide  such  revenue  as  may  be  needful  by  levying  a tax  by  valuation,  so  that  every  person 
and  corporation  shall  pay  a tax  in  proportion  to  the  value  of  his,  her  or  its  property,  such  value 
to  be  ascertained  by  some  person  or  persons  to  be  elected  or  appointed  in  such  manner  as  the 
General  Assembly  shall  direct  and  not  otherwise;  ” and 

Whereas,  the  present  revenue  law  of  this  State,  made  in  conformity  to  said  Constitution, 
requires,  in  levying  such  tax,  that  both  real  and  personal  property  “ shall  be  valued  at  its  fair 
cash  val ue diTidi 

Whereas,  a wide  and  steadily  increasing  departure  from  this  standard  of  exactness  and  im- 
partiality has  caused  great  inequality  and  injustice  in  the  levying  of  such  tax,  and  has  given  rise 
to  a system  which  is  pernicious  and  unjust  in  the  extreme,  letting  off  certain  favored  individuals 
and  kinds  or  classes  of  property,  (at  the  discretion  of  the  assessors)  with  a mere  nominal  taxa- 
tion, and  iniposit  g the  great  burden  of  supplying  the  necessary  revenue  upon  the  rest.  In 
proof  of  this,  while  with  a large  portion  of  tax-payers,  especially  such  as  own  their  homes  and 
hut  little  more,  there  has  been  but  little  diminution,  if  any,  of  their  annual  taxes  from  1873  to 
1883,  the  reports  of  the  State  Auditor  show  that  the  assessed  value  of  the  entire  property  of  the 
State  in  1873  was  ^1,210,108,863  and  in  1883  it  was  $756,432,291,  a falling  off  of  $453,686,572. 
Not  that  the  State,  durjng  this  decade,  was  receding  in  population  and  wealth,  but  because 
the  assessors  were  departing  farther  and  farther,  year  by  year,  from  the  just  standard  of  fair 
and  equal  taxation  fixed  by  the  Constitution,  and  the  revenue  laws  conforming  thereto;  and 
IFAereas,  this  Commission  was  created  for  the  purpose  of  devising  a remedy  for  this  ac- 
knowledged and  growing  evil,  and  as  it  is  apparent  that  the  practice  of  a gross  and  unchecked 
departure  from  the  standard  fixed  by  law  (leaving  to  the  assessors  almost  unlimited  discretion- 
ary control)  has  caused  and  fostered  the  evils  complained  of;  therefore. 

Resolved,  that  the  proper  work  of  this  Commission  will  be,  to  make  no  compromise  with 
evil  and  thus  perpetuate  it,  but  go  back  to  the  plain  and  equitable  requirements  of  the  Consti- 
tution, frame  a revenue  code  in  strict  compliance  therewith,  and  throw  such  restrictions  and 
penalties  around  it  as  safeguards,  as  will  compel  obedience,  fix  a maximum  limit  of  taxation, 
not  exceeding  _ one  per  cent,  on  a fair  cash  valuation  of  property,  to  cover  all  annual  taxes  of 
every  description  whatever,  in  full.  Provide  that  no  class  or  description  of  property,  and  no 
ownership  of  moneyed  value  of  any  sort  (except  that  exempted  by  law)  shall  be  favored  or 
omitted,  but  that  all  shall  be  brought  to  the  light  and  made  to  bear  its  fair  and  just  propor- 
tion of  the  expenses  of  government  for  the  protection  it  receives;  and  lastly,  adjust  and  define 
clearly  the  rate  per  cent,  of  permitted  indebtedness  under  the  limitation  of  the  Constitution,  so 
as  to  be  proportioned  to  the  standard  of  valuation  adopted,  and  thus  protect  with  certainty  the 
people  from  both  extravagance  and  indebtedness,  whether  in  the  State,  county  or  municipality. 
Equality  and  uniformity  are  the  underlying  principles  of  our  revenue  system,  as  prescribed 

(3) 


r 


4 


by  our  State  Constitution.  To  establish  and  maintain  these  there  must  be  a fixed  standard  of 
measurement  and  adjustment,  so  that  exact  and  e'/en-handed  justice  may  be  done  to  all.-  Any 
permitted  departure  from  this  leads  inevitably  to  inequality  and  injustice.  The  necessary  ex- 
penses of  the  Government  must  be  met,  and  if  favoritism  toward  particular  classes  of  property 
and  of  tax-payers  be  permitted,  there  must  be  a corresponding,  and  to  this  extent  unequal,  in- 
crease of  the  burden  upon  the  remaining  property  and  tax-payers  to  make  up  the  difference.  It 
is  a short-sighted  policy  on  the  part  of  men  and  corporations  of  great  wealth,  some  of  whom  enjoy 
very  favored  privileges,  and  all  of  whom  need  especial  protection,  to  evade  the  payment  of  their 
fair  share  of  the  expenses  of  government;  they  are  more  liable  to  need  the  strong  arm  of  govern- 
ment protection  than  their  poorer  neighbors,  and  unless  they  are  willing  to  be  just  to  others  it  natu- 
rally follows  that  such  action  will  weaken  their  claim  for  justice  to  themselves.  Most  men  pay  even 
high  taxes  cheerfully,  if  convinced  that  the  burden  is  fairly  and  equally  distributed  in  propor- 
tion to  the  actual  wealth  of  each  tax-payer,  but  a knowledge  that  favoritism  is  being  shown,  es- 
pecially toward  those  who  are  abundantly  able  to  pay  their  just  share  of  taxes,  brings  a sense  of 
inequality  and  injustice  which  breeds  irritation  and  discontent.  Our  Constitution  requires  that 
the  revenue  shall  be  provided  “ by  levying  a tax  by  valuation,  * * * such  to  be  ascer- 
tained ” as  therein  directed;  it  does  not  say  a of  the  value,  but  the  “ value,"  meaning  cer- 
tainly the  actual  and  entire  worth.  Our  present  revenue  laws  were  passed  in  conformity  with 
this  view  of  the  meaning  of  the  Constitution,  but  the  willful  and  gross  departure  from  the  stan- 
dard thus  fixed  has  certainly  caused  the  inequalities  of  our  present  system.  The  cause  of  this 
departure  and  the  reason  why  public  sentiment  for  a time  tacitly  sustained  it,  is  that  there  has 
not  been  created  by  law  a sufficient  barrier  against  exorbitant  and  oppressive  taxation,  and  men 
of  all  classes  have  naturally  shrunk  from  a full  showing  and  valuation  of  their  property,  for  fear 
of  the  rate  per  cent,  that  might  be  levied  upon  it,  amounting  finally,  if  unchecked,  to  virtual 
confiscation.  The  tendency  of  the  times  is  toward  great  extravagance  and  corruption  in  official 
places,  necessitating  a continual  increase  of  taxation,  and  this  growing  evil,  if  not  effectually 
bridled  and  kept  under  secure  and  healthy  restraint,  will  surely  result  in  making  our  Govern- 
ment a curse  instead  of  a blessing. 

Holding  these  views  honestly  and  firmly,  the  undersigned  submitted  to  the  Commission  a 
resolution  (which  should  be  observed  in  formulating  the  new  code),  and  asked  the  passage 
thereof,  in  substance  as  follows: 

“ Resolved,  that  both  real  and  persontil  property  in  this  State  shall  be  assessed  on  the  basis 
of  its/«b-  cash  value,  and  that  this  Commission  in  adjusting  the  maximum  limitations  of  taxa- 
tion to  cover  the  several  needs  and  purposes  for  which  revenue  is  required,  will  confine  the 
aggregate  of  said  limitations  to  a general  maximum  limitation  of  one  per  cent,  for  all  purposes 
whatsoever,  so  that  the  entire  tax  levy  for  any  one  year  shall  not  exceed  said  general  maximum 
limitation:  Provided,  that  incases  of  emergency  and  actual  need,  any  county,  city,  township, 
village,  or  tax  district  in  this  State,  by  an  affirmative  vote  of  a majority  of  its  voting  population, 
may  increase *said  maximum  rate  of  taxation  for  local  purposes  within  such  county,  city,  town- 
ship, village  or  tax  district  so  voting,  to  an  ^iggregate  amount  not  exceeding  one  and  one  half 
;per  cent,  on  the  valuation  of  property  for  the  current  year;  but  such  affirmative  vote  shall  not 
increase  the  maximum  rate  of  taxation  therein  for  any  year  beyond  that  in  which  said  vote 
shall  be  taken,” 

After  a full  discussion  of  this  resolution,  the  vote  on  its  adoption  was  a tie — 6 for  and  6 
against;  it  was  thus  defeated. 

The  Commission  afterward  adopted  so  much  of  this  resolution  as  applies  to  the  standard  of 
valuation,  and  also  to  a temporary  increase  of  the  rate  per  cent,  of  taxation  in  cases  of  actual 
need  when  asked  for  by  a majority  vote  of  the  people.  (See  Sec.  — of  the  proposed  new  code.) 
But  instead  of  limiting  the  rate  of  permitted  increase  to  the  half  of  one  per  cent.,  as  sug- 
gested in  the  above  resolution,  the  margin  was  widened  as  it  now  stands  to  **  100  per  cent,  of 
the  respective  rates  provided  by  this  act,”  thus  taking  away  a large  share  of  the  protection  to 
tax-payers  which  the  section  on  this  point  was  originally  intended  to  give.  The  vital  and  lead- 
ing principle  contained  in  said  resolution,  to  wit,  that  under  a full  valuation  of  property,  the 
entire  taxes  thereon  should  not  exceed  an  aggregate  of  one  per  cent.,  was  not  carried  out;  and 
here,  in  my  judgment,  is  a fatal  defect  in  the  proposed  new  revenue  code  as  adopted  by  a majority 
of  the  Commission.  That,  one  per  cent,  on  a fair  cash  valuation  of  property  (if  all  the  property 
of  the  State  is  fully  brought  out  and  thus  valued,)  will  not  only  supply  all  the  revenue  needed,  but 
leave  a safe  margin  to  cover  ordinary  contingencies,  is  undoubtedly  true.  A number  of  the  best 
informed  men  in  the  State  on  the  tax  question,  having  thorough  practical  knowledge  concerning 
it,  appeared  before  the  Commission  and  made  full  statements  as  to  their  experience  and  observation 
of  the  actual  working  of  our  present  degenerate,  and  notoriously  corrupt  revenue  system.  These 
gentlemen,  with  remarkable  unanimity,  concurred  in  the  opinion,  that  for  purposes  of  taxation, 
the  equalized  valuation  of  lots  and  lauds  in  the  State  with  the  improvements  thereon,  does  not  ex- 
ceed an  average  of  twenty -seven  per  cent,  of  their  “ fair  cash  value,”  and  as  to  personal  prop- 
erty, the  great  bulk  of  which  escapes  taxation  entirely,  and  the  remainder  is  so  cheaply  valued 
as  to  be  only  the  shadow  of  a pretense  of  compliance  with  the  law,  these  gentlemen  were  decid- 
edly of  the  opinion  that  not  more  than^re  per  cent,  of  the  whole  and  true  value  thereof  is  sub- 
jected to  a percentage  estimate  for  taxation.  In  Cook  county  it  is  believed  that  not  more 
than  three  per  cent,  of  the  true  quantity  and  actual  value  of  personal  property  is  subjected 
to  the  tax  rates;  indeed  one  of  the  best  informed  men  in  Chicago  on  this  subject,  having  inti- 
mate practical  knowledge  thereof,  when  questioned  before  the  Commission  on  this  point,  stated 
that  in  his  opinion  the  per  cent,  was  not  so  much  as  this.  Let  any  lot  or  land  owner  (not  special- 


fy  favored  by  bis  assessor)  look  into  the  taxes  which  he  is  now  paying  upon  his  real  estate,  and 
he  will  find  that  upon  its  actual  cash  value  he  is  paying  fully  one  per  cent.,  and  in  some  cases 
considerably  more  than  this,  whereas,  upon  a fair  distribution  of  the  necessary  burden  of  taxa- 
tion under  our  Constitution,  he  should  not  pay  more  than  about  half  the  tax  which  he  is  now 
paying.  This  justice  being  done  to  real  estate  will  of  course  enhance  its  desirability  and  value. 
I think  that  this  position  is  abundantly  verified  and  sustained  as  follows: 

If  the  estimate  of  real  estate  in  Cook  county  for  the  year  1884,  at  27  per  cent, 
of  its“  fair  cash  value, amounted  to  $133,741,530.00.  then  its  full  and  fair 

cash  value  was • ••S  495,338,900.00 

And  the  equalized  value  of  railroad  property  in  said  county,  set  down  for  said 
year  at  $9,254,321.00,  if  brought  to  a fair  cash  valuation  by  the  same 

rule,  was. $ 34,275,26.3.00 

And  if  the  estimate  of  personal  property  in  said  county  for  said  year,  being  only 
$32,813,135.00,  was  only  three  percent,  of  what  it  should  have  been,  then  a 
full  listing  and  fair  valuation  thereof  would  have  amounted  to $1,093,771,166.00 


making - $1,623,38.5,329.00' 

A tax  on  this  sum  limited  to  one  per  cent,  would  give  $16,233,853,  being  $6,653,035,  more 
than  the  whole  taxes  assessed  in  Cook  county  for  1884  (to  wit,  $9,580,818).  And  six  tenths  of 
one  per  cent,  on  the  total  of  $1,623,385,329.00,  would  have  siven' $9,740,311.00,  being  $159,- 
493.00,  more  than  the  taxes  of  said  county  in  said  year,  on  an  aggregated  levy  of  nearly  six  per 
cent,  oh  the  property  found  and  as  valued  for  taxation. 

The  fair  cash  value  of  the  taxable  property  in  the  State  of  Illinois,  (exclusive 
of  Cook  County)  from  the  best  data  which  the  Commission  obtained  is  not 


less  than $3,600,000,000.00 

Add  estimate  for  Cook  County  as  above 1,623,385,329.00 


Shows  the  probable  total  wealth  of  the  State  of  Illinois  to  be $5,223,385,329.00 

The  average  rate  of  taxation  on  the  $100  valuation  of  property,  in  the  several  counties  of 
the  State,  for  the  year  1883,  as  shown  by  the  Auditor  of  Public  Accounts  in  his  last  report  dated 
November  1,  1884,  was  $3.43,  Cook  county,  being  reported  at  $5.29,  which  was  increased  in 
1884.  Now  if  six  tenths  of  one  per  cent,  (or  60  cents  on  the  $100)  would  have  been  more  than 
sufficient  for  Cook  county  in  1884,  on  a full  and  fair  val  lation  of  property  as  I have  shown,  fifty 
cents  on  the  $100,  would  have  been  more  than  a sufficient  average  for  the  balance  of  the  State, 
showing  beyond  controversy,  that  a maximum  limitation  to  one^  per  cent,  of  the  entire  tax- 
ation leaves  an  abundant  margin  to  cover  all  ordinary  contingencies. 

Again,  in  the  biennial  report  of  the  State  Auditor,  made  November  1,  1884,  pages  92  and 
93,  it  will  be  seen  that  the  whole  amount  of  State,  county,  city,  town,  district,  and  other 
local  taxes,  including  back  taxes  throughout  the  State  for  the  year  1883,  was  $28,063,040,  of 
which  Cook  county  paid  $9,078,003,  nearly  one  third.  One  j)er  cent,  on  $5,000,000,000,  if  the 
proposed  new  revenue  law  is  faithfully  administered,  would  give  $50,000,000  of  revenue  against 
$28,000,000,  as  in  1883.  Can  any  one  believe  that  this  margin  is  not  broad  enough  to  insure 
sufficient  revenue? 

The  Commission  spent  much  time  in  patient,  earnest  effort  to  devise  a code  that  would  com- 
pel the  bringing  out,  and  subjection  to  a fair  cash  valuation  of  all  the  property  in  the  State,  both 
real  and  personal,  except  that  exempted  by  law.  This  part  of  the  proposed  new  code  the  under- 
signed heartily  approves,  but  the  maximum  limitations  as  to  the  permitted  rates  of  taxation, 
aggregating  as  th'y  do  nearly  or  quite  three  per  cent.,  will  open  the  door  to  such  excessive  and 
njerciless  taxation,  as  will  compel  the  people,  in  self -protection,  to  elect  assessors  who  will  shield 
them  by  low  valuations  and  an  utter  disregard  of  the  law,  as  is  the  case  now,  and  thus  the  pro- 
posed new  code  will  soon  drop  back  into  the  same  demoralizing  rut  of  falsehood,  official  bribery, 
and  glaring  inequality  which  we  are  trying  to  escape  from.  The  present  system  (not  the  law, 
but  the  prevailing  practice  and  departure  from  it)  being  in  effect  a standing  premium  for  dis- 
honesty. I am  firmly  convinced  that  the  evils  in  our  present  system  (to  devise  a remedy  for 
which  the  Revenue  Commission  was  appointed)  can  not  be  cured,  unless  the  aggregate  of  the 
rates  per  cent,  of  taxation,  shall  be  so  restricted  by  a settled  maximum  limitation  as  will  secure 
to  the  x>^ople  undoubted  protection  from  unnecessary  and  oppressive  taxation.  This  point 
touches  the  interest  of  every  tax-payer  in  the  State,  and  here  is  the  pith  and  marrow  of  the  ques- 
tion we  were  called  together  to  consider.  It  must  be  apparent  to  every  one,  that  equality  and 
uniformity  in  taxation  can  not  be  reached  or  maintained,  unless  there  is  a fixed  standard  of 
measurement  which  shall  be  strictly  conformed  to  in  all  cases.  A certain  amount  of  revenue  is 
necessary  for  the  support  of  government;  beyond  this  necessary  amount,  the  governing  authori- 
ties should  be  restrained  from  going,  by  a fixed  maximum  limitation,  sufficiently  liberal  for  all 
needful  purposes,  and  yet  sufficiently  low  to  insure  just  protection  to  every  tax-payer,  1 think 
that  I have  demonstrated  that  an.  aggregate  tax  of  one  per  cent,  for  all  purposes  whatsoever,  on 
a full  valuation,  (all  property  of  every  kind  bearing  its  fair  proportionate  share ) is  super- 
abundant to  cover  all  the  needs  of  government  in  this  State.  Without  such  a system,  personal 
property  will  continue  to  escape  its  just  share  of  the  burden  of  taxation;  while  real  estate,  being 
always  in  sight,  easily  found  by  even  the  most  indolent  assessor,  and  powerless  under  coercion, 
will  continue  to  bear,  as  it  now  does  with  manifest  injustice,  the  great  bulk  of  this  annual  bur- 
den.^ If  the  maximum  limitations  should  be  put  down  to  such  a point  as  to  compel  the  search- 
ing for,  and  bringing  out  of  all  classes  of  property,  in  order  to  obtain  the  necessary  revenue, 


.‘Incl  thus  necessitate  a tali*  compliance  with  the  supreme  law  of  the  State,  which  requires  that 
“every  person  and  corporation  shall  pay  a tax  in  proportion  to  the  value  of  his,  her  or  its 
property,”  then,  and  not  till  then,  will  the  evils  of  inequality  and  unjust  taxation  be  effectually 
and  justly  remedied.  It  must  be  plain  to  every  one,  that  a fair,  complete,  and  thorough  dis- 
tribution of  the  burden,  will  greatly  lessen  its  weight  from  the  shoulders  of  those  who  are  now 
bearing  it,  and  this  being  done,  a wide-spread  satisfaction,  growing  out  of  a sense  of  equal  and 
exact  justice  to  all,  will  unquestionably  produce  a strong  and  healthy  public  sentiment,  that  will 
do  more  than  all  else  to  cause  a uniform  enforcement  of  the  law.  It  is  not  only  an  unjust,  but 
an  unwise  policy,  to  discourage  men  by  an  unequal  and  oppressive  taxation,  from  owning  their 
hom^s,  whether  in  town  or  country;  the  very  fact  of  owning  his  home  makes  a man  conserva- 
tive, the  more  owners  therefore  of  the  soil,  the  stronger  and  more  law-abiding  will  be  the  city 
or  the  State,  and  the  most  potent  and  salutary^  check  which  can  be  given  to  the  growing  spirit 
of  communism,  is  to  encourage  such  ownership. 

Honesty  is  the  best  policy  and  Truth  is  the  only  safe  foundation  on  which  to  base  a system 
of  solid  integrity  and  reliability,  commanding  a just  and  sincere  respect  both  at  home  and 
abroad.  _ How  much  better  it  would  be  for  our  young  giant  State,  instead  of  publishing  to  the 
world  biennially,  that  we  are  worth  hut  seven  hundred  and  odd  millions,  and  this  decreasing , 
while  our  taxes  are  from  three  to  six  per  cent,  and  increasing  (see  State  Auditor’s  Reports), 
how  much  better  to  come  up  honestly  to  the  fair  line  of  truth  and  proclaim  (when  verified)  Illi- 
nois is  worth  and  the  aggregated  taxes  for  all  purposes,  are  less  than  one 

percent.  What  an  argument  in  our  favor! 

J therefore  submit^ to  your  honorable  body  for  earnest  consideration,  the  vital  importance  of 
limiting  the  entire  levies  of  taxation  for  any  one  year,  to  an  aggregate  of  not  exceeding  one  per 
cent  on  a full  and  fair  valuation  and  general  assessment  of  all  classes  of  property.  My  chief 
reason  for  making  this  minority  report  is  to  present  this  point  strongly  before  you,  and  to  ear- 
nestly commend  it  to  your  careful  consideration.  It  is,  in  my  judgment,  the  key  to  the  whole 
difficulty;  absolutely  indispensable  to  maintaining  with  any  degree  of  uniformity,  the  standard 
of  valuation  adopted.  I do  not  believe  that  the  proposed  new  code  will  work  any  better  than  tkc- 
old  law,  unless  it  has  this  important  provision  for  the  protection  of  tax-payers;  the  absenc'e  of 
which  in  the  present  revenue  law,  as  I have  attempted  to  show,  is  one  of:  the  chief  causes  which 
have  led  to  the  great  inequalities  in  valuation,  and  deep  injustice  in  assessments,  which  now  ex- 
ist and  which  it  is  so  desirable  to  reinedy. 

THE  RAILROAD  SECTIONS. 

The  sections  in  the  proposed  new  code  in  regard  to  railroads,  under  which  an  assumed  val- 
uation is  reached,  limit  absolutely  and  undeniably  the  entire  tax  of  every  sort  that  can  be  placed 
on  this  assumed  valuation  to  cewA  Can  it  possibly  be  maintained  as  just  and  fair,  to" 

give  this  protection  to  these  wealthy  and  powerful  corporations,  and  deny  it  to  the  people  gen- 
erally? I would  give  this. protection  to  all — treat  all  alike,  following  the  Constitution  faith- 
fully, and  requiring  “ that  every  person  and  corporation  shall  pay  a tax  in  proportion  to  the 
value  of  his,  her  or  its  property;  ” exactly  this  and  nothing^  more. 

These  railroad  sections  in  the  proposed  new  code  are,  it  seems  to  me,  very  objectionable. 
To  my  mind  they  are  unconstitutional.  Being,  however,  only  a layman,  I shall  simply  point  to 
the  plain  letter  of  the  instrument  itsolf,  which  I think  any  practical,  common-sense  man  can 
read  and  properly  understand.  Article  9,  section  1 o'"'  the  Constitution  reads  as  follows:  “ The 
u-eneral  Assembly  shall  provide  such  revenue  as  may  be  needful  by  levying  a tax  by  valuation, 
so  that  every  person  and  corporation  shall  pay  a tax  in  proportion  to  the  value  of  his,  her  or  its 
property.  Such  value  to  be  ascertained  by  some  person  or  persons  to  be  elected  or  appointed  in 
such  manner  as  the  General  Assembly  shall  direct  and  not  otherwise.”  The  railroad  sections  in 
the  new  code  ignore  entirely  the  requirement  that  “ such  value  shall  be  ascertained  by  some 
person  or  persons  to  be  elected  or  appointed  in  such  manner  as  the  General  Assembly  shall  di- 
rect.” In  lieu  of  this,  an  assumed  value  is  reached  by  multiplying  the  “ gross  receipts  of  one 
year  by  five  to  get  a valuation,  and  then  by  dividing  such  valuation  by  five  in  order  to  get  at  a 
rate  per  cent,  of  taxation.  Or,  which  is  the  same  thing,  the  jDroposed  sections  place  the  per- 
centage of  taxation  on  one  year  of  *'  gross  receipts,”  which  is  on  one  fifth  of  the  assumed  valua- 
tion, and  thus  the  Constitution  is  supposed  to  be  complied  with.  To  multiply  a given  sum  by 
five,  and  then  to  divide  the  result  by  five,  it  seems  to  me  accomplishes  nothing,  although  it  is 
the  process  in  this  case  which  is  relied  upon,  I believe,  to  meet  and  satisfy  the  constitutional  re- 
quirement that  taxation  shall  be  by  valuation.  The  returns  of  “ gross  receipts  ” are  to  be  made 
by  the  railroad  officials,  and  upon  these  returns  the  assumed  value  is  to  be  reached,  instead  of 
being  “ ascertained  by  some  person  or  persons  to  be  elected  or  appointed  in  such  manner  as  the 
General  Assembly  shall  direct.”  It  was  conceded  by  the  friends  of  these  sections,  (members  of 
the  Commission),  that  a multiplication  of  the  “ gross  receipts”  of  one  year  by  five,  would  not 
give  a full  valuation  of  railroad  property  (well  informed  men  say  that  by  eight  would  be  nearer 
the  mark),  the  new  code  as  presented  to  you  by  the  majority,  does  propose,  however,  and  con- 
tains stringent  clauses  for  its  enforcement,  that  the  property  of  the  people  generally,  shall  be 
assessed  at  a full  valuation. 

The  sixth  section  of  the  9th  article  of  the  Constitution  reads  as  follows:  “ The  General  As- 
sembly shall  have  no  power  to  release  or  discharge  any  county,  city,  township,  town  or  district, 
whatever,  or  the  inhabitants  thereof,  or  the  property  therein,  from  their  or  its  proportionate 
share  of  taxes  to  be  levied  for  State  purposes,  nor  shall  commutation  tos  smch  taxes  oe  authorized 
in  any  form  whatsoever.'' 


7 


The  leading  argument  of  the  friends  of  these  sections  was,  that  it  would  relieve  the  general 
public  from  all  taxation  for  State  purposes.  I do  not  believe  that  it  will,  or  that  as  much  rev- 
enue will  be  derived  from  railroads  as  under  the  present  law,  but  are  not  these  sections,  under 
the  purpose  for  which  they  are  proposed  to  be  enacted,  in  conflict  with  that  part  of  the  Consti- 
tution quoted  above? 

Again,  article  9,  section  10  (in  part),  reads  as  follows : “The  General  Assembly  * * * shall 
require  that  all  the  taxable  property  within  the  limits  of  municipal  corporations,  shall  be  taxed 
for  the  payment  of  debts  contracted  under  the  authority  of  law.  such  taxes  to  be  uniform  in  he- 
spect  to  persons  and  property,  within  the  jurisdiction  of  the  body  imposing  the  same.’'  ’ By  the 
proposed  sections  in  the  new  code,  to  which  I am  referring,  the  railroad  companies  are  required 
to  pay  a tax  of  not  exceeding  one  per  cent,  on  a partial  valuation  of  their  property,  and  by  a 
clause  in  the  first  of  said  sections,  said  railroad  companies  are  exempted  in  this  State  from  all 
other  taxation  whatever.  Said  clause  reads  as  follows  (referring  to  the  “gross  receipts”  of 
the  past  year  as  reported  to  the  State  Board  of  Tax  Commissioners);  “The  Board  shall  multi- 
ply the  whole  amount  of  such  receipts  for  the  year  by  five  and  the  product  shall  be  deemed  to  be 
the  taxable  value  of  all  the  franchises  and  privileges  legally  exercised  by  such  person  or  corpora- 
tion in  the  State,  and  of  all  the  propet'ty  of  such  person,  or  corporation,  necessary  for  and  used 
ih  the  prosecution  of  his  or  its  said  business  in  this  State.  And  such  fi-anchisf^s,  privileges  4nd 
property  shall  not  be  taxed  in  any  manner  or  for  any  other  purpose,  except  as  herein  provided.” 
Every  cent  of  the  taxes  thus  provided  for,  is  to  go  into  the  State  Treasury,  for  State  purp^'ses. 
And  no  matter  how  great  the  value  of  the  property  of  such  corporations  may  be  in  certain  lo- 
cjilities,  as  in  Chicago  for  instance,  where  th  j value  of  the  aggregated  property  of  the  various  rail- 
roads runs  high  up  into  the  millions,  yet  by  the  heretofore  elastic  interpretation  of  the  word 
“necessary,”  which  it  would  seem  is  to  be  continued,  probably  ninety-five  one  hundredths 
(95-100)  of  this  vast  accumulation  of  valuable  city  property,  is  to  be  exempted  from  all  taxation 
for  local  purpov’s,  or  ^\for  the  payment  o/(niun  clpal)  debts  contracted  under  the  authority  of 
law,"  notwithstin  ling  the  plain  provision  in  Sec.  10,  article  9,  of  theCon  stitution  quoted  above. 

Several  of  tne  large  eastern  railroads  own  millions  of  dollars  worth  of  valuable  property  in 
the  city  of  Chicago,  and  yet  they  run  out  of  the  St.ite  in  ten  or  fifteen  miles.  And  with  fknne 
of  our  large  western  railroads  that  will  aggregate,  including  all  their  branches  and  t-‘rniinal 
points,  probably  four  or  five  thousand  miles  in  extent  (these  also  own  vast  amounts  of  valuable 
property  in  Chicago),  and  yet  run  out  of  the  State  in  twenty  or  thirty  miles.  But  overlooking 
this,  or  passing  it  by  as  of  no  consequence,  the  new  code  proposes  to  aggregate  the  entire  line 
with  all  its  branches  and  terminals,  and  (quoting  therefrom)  “ divide  the  total  gross  receipts 
of  the  whole  line  by  the  number  of  miles  of  the  whole  line,  and  multiply  the  quotient  by,  the 
number  of  miles  of  such  line  situated  in  Illinois,  and  the  product  shall  be  the  gross  receipts  of 
such  person  or  corporation,  for  purposes  of  taxation  in  pursuance  of  this  act.” 

A glance  at  this  brief  summary  shows  that  such  a tax  arrangement  will  be  exceedingly  unjust 
to  Chicago,  And  when  we  consider  that  every  mile  of  the  most  remote  branch  of  one  of  these 
western  railroads,  where  the  business  probably  justifies  but  two  trips  a week  with  one  car.  and 
an  old  locomotive,  is  evened  up  mile  for  mile  and  the  “gross  receipts”  or  earnings  equally 
divided  between  such,  and  the  great  trunk  lities  running  out  from  Chicago,  with  forty  or  more 
trains  per  day  passing  over  them,  such  division,  it  seems  to  me,  is  palpably  unjust  to  the  State  of 
Illinois. 

' The  Revenue  Commission  at  first  revised  the  present  revenue  law ; and  changed,  amended 
and  adopted  a series  of  sections  concerning  railroads  which  remained  for  some  time  without 
change.  The  sections  now  proposed  in  the  new  code,  as  adopted  by  the  majority,  were  at  a late 
day  substituted  for  the  entire  sections  concerning  railroads  in  the  present  law  as  amended  by  the 
Commission.  The  vote  upon  the  motion  thus  to  substitute,^  stood  at  first  a tie,  6 tor  and  6 
against.  At  a subsequent  meeting,  one  member  changed  sides  and  the  proposition  was  thus 
carried?  to  5,  the  five  remaining  unchangecj’ and  opposed  to  such  substitution  to  the  end  of  the 
se^ion.  I herewith  submit  these  amendments  to  the  present  revenue  law  of  the  State,  concern- 
ing railroads  (to  wit;  sections  40  to  52  inclusive.  Auditor’s  Edition),  as  prepared  and  adopted 
by  the  Revenue  Commission  in  the  early  part  of  its  work  as  above  explained,  and  propose  them 
to  your  honorable  body  in  lieu  of  the  several  sections  concerning  the  taxing  of  railroads  after- 
ward substituted,  and  which  will  be  submitted  by  the  majority  of  the  Commission. 

Being  required  by  the  joint  resolution  under  which  the  commission  was  appointed,  to  report 
to  the  Secretary  of  State  on  or  before  the  1st  of  March,  1886,  I have  not  time  to  see  th6  final 
compilation  of  the  new  code  as  prepared  by  the  majority  of  the  Commission,  and  can  not  there- 
fore refer  to  the  several  sections  by  the  numbers  which  will  finally  be  assigned  to  each,  and  es 
they  will  stand  as  presented  to  you.  Neither  have  I seen  the  address  which  will  accompany  the 
report  of  the  majority. 

Following  are  the  proposed  amendments  to  the  present  railroad  revenue  law,  referred  to 
above,  and  which  I o.ffer  for  the  consideration  of  your  honorable  body,  in  lieu  of  those  adopted 
by  the  majority  of  the  Commission ; 

That  section  41  be  so  amended  as  to  read  as  follows ; 

They  shall,  in  the  month  of  May,  in  each  year,  make  out  and  file  with  the  county  clerks  of 
the  respective  counties  in  which  the  railroad  may  be  located,  a statement  or  schedule  showing 
the  property  held  for  right  of  way,  and  the  length  of.  the  main  and  all  side  and  second  tracks 
and  turnouts  in  such  county,  and  in  each  city,  town  and  village  in  the  county,  through  or  into 
which  the  road  may  run,  and  describing  each  tract  of  land  through  which  the  road  may  run,  in 
accordance  with  the  United  States  surveys,  giving  the  exact  location,  width  and  length  of  the 


8 


strip  of  land  held  in  each  tract,  and  the  number  of  acres  thereof.  They  shall  also  state  the  value 
of  buildings  and  structures  located  on  the  right  of  way;  and  shall  at  the  same  time  file  with  said 
clerk  an  accurate  plat  of  the  land  embraced  in  such  right  of  way.  New  companies  shall  make 
such  statement  in  May  next  after  the  location  of  their  roa.ds.  The  company  shall,  during  the 
month  of  May,  annually,  report  the  value  of  such  property  by  the  description  set  forth  in  the 
next  section  of  this  act,  and  note  all  additions  or  changes  in  such  right  of  way  as  shall  have  oc- 
curred. 

That  section  42  be  so  amended  so  as  to  read  as  foil  ows : _ 

Such  right  of  way,  not  exceeding  one  hundred  feet  in  width,  including  the  superstructure  of 
main  and  side  or  second  tracks  and  turnouts,  but  excluding  all  buildings  and  other  improve- 
ments, shall  be  held  to  be  real  estate  for  the  purpose  of  taxation^  and  denominated  “ railroad 
track,”  and  shall  be  so  listed  and  valued;  and  shall  be  described  in  the  assessment  thereof  as  a 
strip  of  land  extending  on  each  side  of  such  railroad  track,  and_  embracing  the  same,  commenc- 
ing at  a point  where  such  railroad  track  crosses  the  boundary  line  in  entering  the  county,  city, 
town  or  village,  and  extending  to  the  point  where  such  track  crosses  the  boundary  line  leaving 
such  county,  city,  town  or  village,  or  to  the  point  of  termination  in  the  same,  as  the  case  may 
be,  containing acres,  more  or  less  (inserting  name  of  county,  township,  city,  town  or  vil- 

lage, boundary  line  of  same,  and  number  of  acres,  and  length  in  feet),  and  when  advertised  or 
sold  for  taxes,  no  other  description  shall  be  necessary. 

That  section  43  be  so  amende:!  as  to  read  as  follows: 

The  value  of  the  ” railroad  track  ” shall  be  listed  and  taxed  in  the  several  counties,  towns, 
villages,  districts  and  cities,  in  the  proportion  that  the  length  of  the  main  track  in  such  county, 
town,  village,  district  or  city  bears  to  the  whole  length  of  the  road  in  this  State. 

That  section  46  be  so  amended  as  to  read  as  follows: 

The  buildings  and  improvements  other  than  track  upon  the  right  of  way,  the  tools  and  ma- 
terials for  repairs,  and  all  other  personal  property  of  any  railroad,  except  “ rolling  stock,”  shall 
Pe  listed  and  assessed  as  personal  property  in  the  county,  town,  village,  district  or  city,  wher- 
ever the  same  may  be  on  the  first  day  of  May.  All  real  estate,  other  than  that  demoninated 
“ railroad  track,”  belonging  to  any  railroad,  shall  be  listed,  assessed  and  taxed  as  lands  or  lots, 
as  the  case  may  be,  in  the  county,  town,  village,  district  or  city  where  the  same  are  located. 

That  section  47  be  so  amended  as  to  read  as  follows : 

The  county  clerk  shall  return  to  the  assessor  a copy  of  the  schedule  or  list  of  the  real  estate 
fother  than  “ railroad  track,”)  and  ot  the  personal  property  (except  “rolling  stock,”)  pertain- 
ing to  the  railroad;  and  such  real  and  personal  property  shall  be  assessed  by  the  assessor.  Such 
property  shall  be  treated  in  all  respects,  in  regard  to  assessment  and  equalization,  the  same  as 
other  similar  property  belonging  to  individuals;  except  that  it  shall  be  treated  as  property  be- 
longing to  railroads,  under  the  terms  “ lands,”  “ lots,  ” and  “ personal  property.” 

That  section  48  be  so  amended  as  to  read  as  follows: 

On  or  before  the  tenth  day  of  August,  the  person,  company  or  corporation  running,  operate 
ing  or  constructing  any  railroad  in  this  State,  shall  return  to  the  Auditor  of  Public  Accounts 
sworn  statements  or  schedules  as  follows : 

First. — Of  the  property  demoninated  “railroad  track,”  giving  the  length  of  the  main  and 
side  or  second  tracks  and  turnouts,  and  showing  the  proportions  in  each  county,  and  the  total 
in  the  State. 

Second. — The  “ rolling  stock,”  giving  the  length  of  the  main,  track  in  each  county,  the 
total  in  this  State,  and  the  entire  length  of  the  road. 

Third. — Showing  the  number  of  ties  in  track  per  mile,  the  weight  of  iron  or  steel  per 
yard  used  in  main  and  side  tracks;  what  joints  or  chairs  are  used  in  track;  the  ballastinsr  of 
road,  whether  gravel  or  dirt;  the  length  of  time  iron  in  track  has  been  used,  and  the  length  of 
time  the  road  has  been  built. 

Fourth.- -k  statement  or  schedule,  showing:  1.  The  amount  of  capital  stock  authorized, 
and  the  number  of  shares  into  which  such  capital  stock  is  divided.  2.  The  amount  of  capital 
stock  paid  up.  .3.  The  market  value,  or  if  no  market  value,  then  the  actual  value  of  the  shares 
of  stock.  4.  I’he  total  n.mount  of  all  indebtedness,  except  for  current  expenses  for  operating 
the  road.  .5.  The  total  listed  valuation  of  all  its  tangible  property  in  this  State,  Such  sched- 
ule shall  be  made  in  conformity  to  such  instructions  and  forms  as  may  be  prescribed  by  the  Au- 
ditor of  Public  Accounts. 

That  section  49  be  so  amended  as  to  read  as  follows:  If  any  person,  company  or  corpora- 
tion, owning,  operating  or  constructing  any  railroad,  shall  neglect  to  return  to  the  county  clerks 
the  plats  and  .statements  or  schedules  required  to  be  returned  to  them,  the  property  so  to  be  re- 
turned and  assessed  by  the  as, sessor.  shall  be  listed  and  ' asses.sed  as  other  property.  In  case  _ of 
failure  to  make  returns  to  the  Auditor,  as  hereinbefore  provided,  the  Auditor,  with  the  assist- 
ance of  the  county  clerks  and  assessors,  when  he  shall ' require  such  assistance,  shall  ascertain 
the  necessary  facts,  and  lay  the  same  before  the  State  Board  of  Equalization.  In  case  of  failure 
to  file  said  plats  or  make  said  statements,  either  to  the  county  clerk  or  Auditor,  such  corpora- 
tion, company  or  person  shall  forfeit,  as  a penalty,  not  less  than  one  thousand  nor  more  than  tea 
thousand  dollars,  for  each  offense,  to  be  recovered  in  any  proper  form  of  action,  in  the  name  of 
the  People  of  the  State  of  Illinois,  and  paid  into  the  State  Treasury. 

All  of  which  is  respectfully  submitted. 

CHARLES  S.  WALLER, 

A menihcr  of  Revenue  Commission, 

flhicago,  Ecbruaiy^fi,  1886. 


